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City leaders originally planned for the shelter to close in March, so the latest plans extend its life by at least two months.

Steinberg said he plans to meet with the property owner next week to discuss extending the city's lease.

Melissa Sanchez, an attorney who represents the building owner, identified in public documents as Brian Mitchell, said he is open to extending the city's lease.

"It's a very real concern to not close the shelter and put 200 people onto the streets," Sanchez said in an interview earlier this month. "The owner is willing to consider it," even though he has other potential tenants.

"He wouldn't be doing this just for monetary reasons," she said. "It's an issue that is important to him. He drives down Highway 160 every day, and he sees what's happening and it concerns him on a personal level."

Steinberg said he will push the City Council to set aside money from its general fund budget – which pays for most core city services like police and fire protection – to operate homeless shelters in the fiscal year that starts July 1. The Railroad Drive shelter costs about $411,000 a month in general fund dollars and required $492,000 in upfront costs to open, according to a city staff report.

City staff said the shelter will cost a total of nearly $2.1 million through the end of March. That includes the upfront costs, as well as increased police patrols and trash pickup around the site. Staff had initially budgeted $1.7 million.

Councilwoman Angelique Ashby said last month she was growing concerned with the amount of money being spent on the shelter and that she opposes spending general fund dollars on future additional shelters. Steinberg said he wants to use public funding, but also money from the private sector he has begun to raise to support homeless services and rental subsidies.

"Not only does the public think it's worthy, they're demanding more action," the mayor said. "This is a compelling priority, if not the compelling priority and they want results."

Sacramento leaders have been considering a ballot measure this fall to extend or increase Measure U, a sales tax that goes into the general fund.

Larry Glover-Meade, president of the Woodlake Neighborhood Association, said nearby residents "have compassion" for the homeless individuals sheltered in the Railroad Drive facility. He said "keeping it open in the short-term makes sense."

"Since there are no other shelters, it is an understandably sad situation," he said. "What do you do with folks?"

However, the neighborhood's patience won't last long if the city doesn't open shelters in other areas, Glover-Meade said.

"I don't think it's fair to ask one underserved part of the city to take on the burden of one permanent homeless shelter," he said. "We want to be part of the solution, but it's unfair to ask this community to take on all that responsibility."

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